The world of crypto-bros and digital creators is no longer limited to non-fungible tokens. Luxury brands are also joining the fray by 2022.
Taking advantage of the value that NFT ownership offers as well as the technological innovation it offers, a growing number of brands are partnering with marketplaces, crypto artists and other NFT experts.
At the end of winter 2021, 17% of brands in the Vogue Business Index were working with NFTs. Through elaborate partnerships and structures, strategies evolved from art projects and digital collectibles to tokens offering special benefits.
A four-minute film inspired by Gucci’s latest collection and produced by filmmaker Floria Sigismondi and creative director Alessandro Michele was auctioned by Gucci as the first NFT in April. NFTs have also been used by other brands, such as Dolce & Gabbana, Balmain, Jimmy Choo and Givenchy.
According to Morgan Stanley, the luxury goods market could be dominated by metaverses, games and NFTs by 2030.
It may seem absurd to pay a premium for non-existent clothes, but it is no less absurd than paying premiums for handbags, watches, perfumes and other tangible items whose quality is comparable to that cheaper alternatives.
“Redeeem NFT”, Troika’s new NFT marketplace, provides a platform for luxury asset-backed NFTs and lists a variety of exclusive luxury products, including handbags, wallets, shoes and items of collection.
NFTs are valued by market demand, and their individuality often drives that value up. It’s the same principle that the luxury industry uses, like the limited-edition Birkin bags from Hermès that cause a frenzy to get them.
So much buzz is being generated around their potential explosive combination in part because both NFTs and luxuries are based on scarcity. It is also worth exploring whether NFTs can help solve some problems in the luxury industry.
For example, luxury brands can demonstrate that their products are ethically sourced, certified sustainable, and made using certain materials and artisanal techniques. Moreover, it tells the story of the products, it shows that they have a past and a future.
NFTs offer something better: blockchain. Using a digital ledger to tell a product story makes sense since, in a sense, the blockchain is a story – a complete, unalterable record.
Fashion will be a driving force in NFTs, not only because of the fashion houses and designers themselves, but also because of the many companies that will create resources for them.